Iran’s "scorched earth" strategy appears to be a response to the perceived existential threat posed by the U.S.-Israeli strikes. By attacking the infrastructure of U.S. allies like Saudi Arabia and the UAE, Tehran is signaling that it intends to make the cost of "regime change" unbearable for the global economy.
In early March 2026, the Middle East was thrust into a new and dangerous phase of conflict as U.S. and Israeli forces launched joint attacks on Iranian targets, prompting a broad Iranian military response across the Gulf region. Among the most consequential developments, Iran’s Islamic Revolutionary Guard Corps (IRGC) declared the strategic Strait of Hormuz effectively closed to maritime traffic, and Iranian strikes have targeted oil and gas infrastructure in key Gulf states, moves that have together shaken the global energy markets and raised urgent questions about the future of supply flows.
Why the Strait of Hormuz Matters
The Strait of Hormuz is one of the most critical maritime chokepoints in the world. It connects the Persian Gulf to the Arabian Sea and beyond, serving as a gateway for roughly 20% of the world’s seaborne crude oil and liquefied natural gas (LNG). Major Gulf oil exporters rely on this narrow channel to send energy supplies to markets across Asia, Europe, and beyond. Disruption in the Strait would mean direct pressure on global energy supply and price stability.
Despite Iran’s Islamic Revolutionary Guard Corps (IRGC) statement, it is important to note that the closure is not legally binding in the sense of an internationally recognized blockade. However, the declaration, along with warnings to set fire to any ship attempting to pass, has had the practical effect of significantly reducing maritime traffic and prompting shipping companies to reroute or suspend passage out of safety concerns.
Infrastructure Under Fire: Ras Tanura, Qatar's LNG Plants, and Beyond
If the Hormuz closure represents a threat to the shipping lane, Iran's direct strikes on Gulf energy infrastructure represent a threat to the source. The scale and specificity of the attacks mark a dangerous escalation from previous episodes of tanker harassment to deliberate targeting of the production and export facilities that underpin global energy trade.
Saudi Arabia's Ras Tanura refinery, one of the world's largest oil processing complexes, with a capacity of 550,000 barrels per day, and home to the kingdom's biggest offshore crude loading terminal, was struck by Iranian drones on March 2. Saudi Aramco confirmed a fire broke out at the complex and shut down operations as a precautionary measure. Separately, Aramco had already halted liquefied petroleum gas exports from the nearby Juaymah plant following structural damage earlier in the week. Ras Tanura is not merely a refinery; it is a cornerstone of Saudi Arabia's ability to meet export commitments to global customers, Japan among them.
In Qatar, the impact has been even more severe. On March 2, Iranian drones struck two of QatarEnergy's operating facilities, one at Ras Laffan Industrial City and one at Mesaieed Industrial City. QatarEnergy, the world's largest LNG producer, accounting for approximately 20 percent of global supply, confirmed it had ceased production of liquefied natural gas and associated products. The Ras Laffan complex alone operates 14 LNG production trains with a total annual capacity of 77 million tonnes.
Escalation After U.S. and Israeli Attacks
Iran’s attacks came after a series of military strikes by the U.S. and Israel targeting Iranian military infrastructure and killing the Supreme Leader of Iran, Khamenei. On February 28, the United States and Israel launched coordinated strikes on Iran under Operation Epic Fury, targeting military facilities, nuclear sites, and leadership. Iran responded with missile and drone attacks on U.S. military bases across the Gulf, in Qatar, Bahrain, Kuwait, and the UAE, as well as direct strikes on Israeli territory.
Under these conditions, maritime authorities have confirmed increased military activity around the strait, urging commercial shipping to avoid the area if possible.
Within hours of the initial strikes, the IRGC began broadcasting warnings to commercial vessels, effectively declaring the strait off-limits. Ship-tracking data showed tanker traffic dropping by approximately 40 to 70 percent, with over 150 vessels, including crude oil tankers and LNG carriers, dropping anchor in open Gulf waters rather than attempting transit. Three tankers were struck by projectiles near the strait, with one set ablaze off the coast of Oman.
Major shipping companies responded immediately. Maersk, Hapag-Lloyd, MSC, and CMA CGM all suspended vessel crossings through the Strait of Hormuz until further notice and began rerouting ships around the Cape of Good Hope, adding 10 to 15 days to transit times and significantly increasing shipping costs. Maritime war-risk insurers began withdrawing coverage for vessels entering the Persian Gulf, further discouraging traffic.
Immediate Market Reactions
The IRGC’s threatening stance toward vessels has already influenced markets:
- Oil Prices Spike: In the immediate aftermath of the crisis, Brent crude rose by up to 13 percent to $82 per barrel. Senior experts at Kpler expect big price hikes.
- Shipping Suspensions: Some tanker operators and trading houses reportedly suspended crude, fuel, and LNG shipments through the strait, waiting for clarity on safety and insurance conditions. Experts warn, “The most immediate pressure point is logistics, war-risk insurance, freight economics and potential disruption around the Strait of Hormuz, with Asia most exposed on crude”
Market volatility has also triggered wider reactions in financial markets, with investor risk aversion spilling over into equities and commodities elsewhere.
Global Energy Trade at Risk
Because such a large share of global oil and gas trade passes through Hormuz, any sustained disruption could reverberate across world economies. Countries heavily dependent on Middle Eastern energy, such as Japan, South Korea, and many European states, are especially vulnerable to rising prices and supply chain bottlenecks.
Even if the closure is not fully enforced in every sense, the perception of heightened risk is enough to change commercial calculations. Shipping firms may avoid the strait to minimize insurance costs or exposure to conflict risks, leading to routing changes and higher freight rates.
Uncertain Duration and Future Risks
It remains unclear how long the current tensions will persist, or whether the “closure” will become a de facto long-term disruption. Analysts note that actual stoppages in global traffic require sustained enforcement and cooperation among military and civilian authorities, something that is difficult to achieve even in wartime.
However, as long as the IRGC’s threats and regional military conflicts continue, energy markets will likely remain sensitive to any further deterioration in security conditions.
The declaration by Iran’s Revolutionary Guards that the Strait of Hormuz is closed, following U.S. and Israeli strikes, represents one of the most serious geopolitical escalations affecting global energy trade in recent years. Even if the closure is not absolute, its impact on shipping, energy prices, and market confidence is already being felt.
Sources:
https://www.aljazeera.com/economy/2026/3/2/why-qatarenergys-lng-production-halt-could-shake-up-global-gas-markets
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GÖNÜLTAŞ, Mehmet（Reporter）
Freelance journalist based in Istanbul, Turkey. He writes on international relations and diplomacy, with a focus on Japan–Turkey relations, military affairs, and democratic governance. His hobbies are running, language study, and traveling.
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